James Tunkey co-authored this article. He is Chief Operating Officer of I-OnAsia, a global business intelligence company providing firm-specific risk advisory. James has 30 years’ experience assessing operational risks internationally.

We are living through a period of tremendous change for global trade. New U.S. tariffs and national security barriers are dramatically disrupting corporate activity globally. This uncertainty creates strain for Main Street and Wall Street alike.

Manufacturing Footprint Optimization

The key to reducing the pain caused by new U.S. trade policies is dynamic manufacturing footprint optimization for multinational businesses. However, decisions on where to invest or divest aren’t often truly holistic.

Survival requires a rigorous process. Rushed moves without proper intelligence and analysis can introduce new risks, so all relevant stakeholders should have a seat at the table to enable a joint solution. Intelligence can then be delivered to inform decisions.

Additionally, hiring an adviser who can see risks more clearly can calm lenders and other stakeholders and show management recognizes distress. Perceptions can then shift to create breathing room needed for real solutions.

The Pace of Decision Making Matters

Periods of volatility leave both businesses and lenders searching for certainty. Because the changes to U.S. tariff policies are happening so rapidly, companies will need to bolster their capacity to make wise decisions more quickly.

But with limited certainty around what it’s going to be like in the years ahead, it is more difficult to act. Many businesses can’t prepare a realistic cash flow because they are uncertain about what the future is going to hold in terms of the tariff level. Geopolitical risk scenario planning is not robust across manufacturers and non-financial institutions.

Such inaction and lack of direction can spook investors. If/when lenders get concerned about their capital and permanent capital losses, the situation can change very quickly. So sitting on your hands is not the right approach. In a crisis, credibility is everything. A track record of reliability can significantly improve outcomes.

Enter Scenario Analysis & Geostrategic Intelligence

The dynamics created by recent geopolitical changes are presenting an opportunity for new solutions to emerge through collaboration between corporate recovery experts who know what levers can be pulled to ensure corporate survival and geopolitical intelligence specialists.

Being able to accurately identify key scenarios and apply probabilities is both a science and art. It puts structure on uncertainty and gives you parameters within which to make a decision — and that’s invaluable. For example, a quality geopolitical risk analyst can come up with scenarios and likelihood percentages.

For example, insights from corporate recovery experts can then be overlayed with scenario analyses to take a holistic approach to making decisions like the following: Where should these businesses be? Where should the footprint be? Where should the investment be going forward? What should my strategy be going forward?

Stop Extending & Pretending

By understanding how a business might be impacted by tariffs, and having better scenarios for how portfolios of companies may be affected, banks — including new private credit funds — can stop “extending and pretending.”

Yes, in times of distress, an investor could struggle to make a decision because businesses can’t prepare a realistic cash flow and will then allow struggling borrowers more time to repay loans instead of forcing a default, restructuring, or liquidation. By extending the maturity of a loan, and pretending a borrower’s situation will improve, lenders avoid immediately recognizing any losses.

But with better insights and scenarios, smart money can act before it is too late. It is possible to marry the heat map of geopolitical intelligence with the art of corporate recovery, providing structure, probabilities, and concrete recommendations in times of profound uncertainty and lender forbearance.

Once scenarios are clarified, financial and operational experts can apply scenario analysis, sensitivity testing, and supply chain network optimization models to quantify the impact on costs, cash flows, and enterprise value. These tools provide lenders with a structured view of risks and help management identify resilient strategies. Lenders are familiar with these concepts. It’s difficult with one loan, but if they’ve got 100 loans, they can review the scenarios and see the risks to which they are exposed. The quality of scenario planning hinges on how diversified the lender is.

Then change can be monitored on a geopolitical risk heat map for ongoing intelligence and preparedness for the future.